SEBI Master Circular for Debenture Trustees

SEBI Insider Trading has issued a Master Circular for Debenture Trustees on July 06, 2023 to replace all previous circulars issued to debenture trustees. The provisions of the Master Circular shall come into force with effect from April 01, 2023, unless specifically mentioned otherwise in this circular.

As per the master circular, Debenture Trustee, by itself or through professionals appointed and compensated/ remunerated by the Debenture Trustee viz., practicing chartered accountant, practicing company secretary, registered valuer, or legal counsel shall independently carry out due diligence. The terms and conditions with respect to exercising due diligence shall also be included in the debenture trustee agreement. The due diligence to be exercised by Debenture Trustee with respect to creation of security shall inter-alia include the following:

Debenture Trustee shall verify that the assets provided by Issuer for creation of security are free from any encumbrances or necessary permissions or consents has been obtained from existing charge holders by carrying out the following checks:

Verify from Registrar of Companies, Sub-registrar, CERSAI, IU or other sources where charge is registered/ disclosed as per terms.

In case of conditional consent/ permission received as per para 2.1(c)(ii) above: (A)Verify whether such conditional consent/ permission given to Issuer by existing charge holders is valid as per terms of transaction documents; and (B)Intimate existing charge holders through necessary and appropriate means (including via e-mail) about the proposal to create further charge on assets by Issuer seeking their comments/ objections, if any, to be communicated to the Debenture Trustee within next five working days.

SEBI on June 30, 2023 has issued clarification regarding Implementation of circular on upstreaming of clients’ funds by Stock Brokers (SBs) / Clearing Members (CMs) to Clearing Corporations (CCs). As per the framework, no clients’ funds shall be retained by SBs/ CMs on End of Day (EoD) basis. The clients’ funds shall all be upstreamed by SB/ CMs to CCs only in the form of either cash, lien on FDR (subject to certain conditions enumerated below), or pledge of units of Mutual Fund Overnight Schemes (MFOS).

Representations have been received from various stakeholders viz. MIIs, stock brokers, and associations that the changes to the systems are still under progress, and that there are certain practical difficulties in implementation of the proposal framework.

Therefore it is clarified that SBs/CMs may receive funds from clients beyond the prescribed cutoff time for upstreaming subject to the condition that there shall not be any further movement of funds from that account (i.e., a debit freeze) till the opening of upstreaming window on the next day.

BSE vide notice dated 28 June 2023 has issued clarification regarding implementation of SEBI (Prohibition of Insider Trading) Regulations, 2015 (“PIT Regulations”) – Framework for restricting trading by Designated Persons (“DPs”) by freezing PAN at security level.

All listed companies shall declare financial results on March 31, 2024 and trading window shall close on April 1, 2024.

Listed entities are required to designate one of the depositories as its designated depository and provide the information including PAN of Promoter(s), promoter group, director(s) and designated person(s). Further, listed entities shall update their designated person list in the manner specified by the depositories on regular basis.

This circular shall come into force with effect from the quarter ending September 30, 2023.

SEBI notification dated 27 June, 2023, has clarified that in order to facilitate securities market participants to remit fees payable to SEBI online, a link has been provided in the Homepage of SEBI Website (www.sebi.gov.in) under the head “Click here to make payment of SEBI Fees”. The link enables the remitter to make payment in any of the following manner:-Net Banking;-NEFT / RTGS;-Debit Cards / Rupay Debit Cards-UPI.

While making the remittances online, entities shall furnish the requisite information like name, email ID, mobile number, address, PAN, nature of fee, GST details (if applicable), etc. The above facility is for any entities other than registered intermediaries requiring to make payment to SEBI. SEBI registered intermediaries and applicants for fresh registration will continue to remit fees (Application Fee, Registration Fee, Renewal Fee, Filing Fee, etc.,) through SEBI Intermediaries Portal i.e., siportal.sebi.gov.in.

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